Bhushan Steel hits lower circuit for seventh consecutive day

Kotak Mahindra Investments and Aditya Birla Finance collectively invoked 2.53 million shares of Bhushan Steel.

Bhushan Steel has hit the lower circuit of seventh straight day, down 5% at Rs 161 on National Stock Exchange (NSE), as the lenders begin invoking pledge shares.

A combined 147,393 shares changed hands and there are pending sell orders for 3.04 million shares on NSE and BSE.

Since August 5, the stock has plunged 58% from Rs 381, after the Central Bureau of Investigation (CBI) arrested the company’s vice-chairman and managing director, Neeraj Singal, in connection with Rs 50-lakh bribery scandal. The stock is currently trading at its lowest level since August 2009.

Kotak Mahindra Investments and Aditya Birla Finance collectively have invoked 2.53 million shares representing 1.2% of total equity of Bhushan Steel in past week.

On August 4, Kotak Mahindra Investments invoked 1.16 million shares, and Kotak Mahindra Bank invoked 500,000 shares of Bhushan Steel, according to disclosure made by the company on BSE. On August 6, Aditya Birla Finance invoked 872,000 equity shares of Bhushan Steel, it added. Other lenders that have made similar loans include JM Financial, ECL Finance, STCI Finance and IFIN Securities.

As per June 2014 shareholding pattern data, promoters held 71.29% stake in the company, of which 74.21% was pledged with financial institutions.